Most large mailers use the services of a list
processor. List processors may be independent firms or they may be associated
with the list owner, list manager, list broker, a printer, a lettershop or a
fulfillment house. They are service bureaus that do the data processing functions
necessary to maintain the mailing lists. They process the lists so they are
ready to be used for personalizing and addressing the mail pieces. Some of the
functions performed by the list processors are explained below.

Address Standardization

The USPS requires that an address be accurate
and complete to allow an exact match to the current Postal Service ZIP+4 and
City State Files to obtain the finest level of ZIP+4 and delivery point codes
for the delivery point address. The address must be fully spelled out or be
abbreviated according to the standard abbreviations set up by the USPS. There
is CASS-certified software available to convert your mailing list addresses
into a format that is acceptable by the USPS so that your mail will classify
for automated mail rates.

The merge/purge service has two processes. The
merge process consists of combining several lists together to make one list
and then sorting, usually by ZIP codes. The second process is the removal of
duplicate entries from the combined list.

The software used to perform the merge/purge service,
may vary among list processors. The systems will use different ways of detecting
duplicates, such as similar names with slightly different spellings, detecting
transposed characters, data entry error logic, and ZIP-code logic. Some systems
even have ways of matching urban, suburban and rural addresses.

Duplicate files can be detected according to varied
criteria. The method you choose will depend on how many mailings you want sent
to a duplicate address. Some common methods are listed below.

Per Name - Detects the same name and address as a duplicate.

Per Address - Detects an exact address as a duplicate.

Per Company - Detects matching company name and address as a duplicate.

Per Individual - Allows each individual to receive the mailing,
even if the company name and address are detected as a match.

Selecting "Per Name" would allow a direct
mail package to be sent to each name on the list even if the address was a duplicate.
"Per Address" would allow only one package per address, any duplicate
addresses would be purged even if the name was different.

Some systems will take the duplicate files and
merge them into one file. The file of duplicates would produce a list of multi-buyers.
The list would contain the names of consumers who have made more than one purchase
as a direct mail response. The list of multi-buyers will generally produce a
higher response rate. Arrangements can be made to use this list for a mailing
at a later date.

Removing duplicate files is an easy and inexpensive
process that makes your list more efficient and saves you money. You will save
money in producing fewer mail packages and on postage by not sending more than
one package to the duplicate addresses.

When the merge/purge process is completed, the
total number of names left on the merged list can be substantially less than
the total of all the lists. To ensure that you do not end up paying for the
total count of all the lists, you must arrange for your list broker so secure
an "85% agreement" when he is dealing on the list for you. The "85%
agreement" means that you agree to pay for no fewer than 85% of the original
list total. If the net count is 91% of the original count, you pay for 91%,
but if the net count is 73%, you pay 85%. Making this type of agreement is a
way for you to get some discount off the original count but it also protects
the list owner and broker from loosing too much. There are variations to the
"85% agreement" but be sure the variations are negotiated with your
list broker before ordering your list.

It is important that a list owner keeps his list
up to date. 20 percent of Americans move each year so that will reflect in 20
percent of your list becoming obsolete in a year. Some reasons why it is important
that the lists be updated are listed below.

If you do not up date your list periodically it can result in a substantial
percentage of your prospects receiving your package late or not at all.

It minimizes the charges imposed by the postal service for correcting
an address to make it deliverable.

It will presents the list as being clean and updated, making it a fair
value for list renters.

The most popular technique used today to perform
the list updating task is the postal system's National Change of Address (NCOA)
Service. The list processing firms are licensed by the USPS to perform this
service. It allows the processor to match its list against the post office's
active recipient files for address changes and move notices.

Matching the list with the NCOA service can also
add carrier route codes which results in faster handling of the mail and possible
postage savings. Another value that can be added is the demographic data by
individual family characteristics or by census tract which can be used in suppression
processing.

Suppression is the use of computer matching techniques
to eliminate selected names from a mailing list. The names selected for elimination
could be for one of the following reasons.

You may want to eliminate your customer list so that you are not sending
a "New Customer Introductory Offer" to a current customer.

Sometimes customers indicate that they want to receive mail form the company
of which they are a customer, but they do not want their names rented or
given to other companies. The DMA (Direct Marketing Association) requires
that member companies must offer this option.

Mail Preference Service offered by the DMA, which allows people to request
that their names are removed from mailing lists so that they are not sent
any kind of direct mail.

Names can be eliminated by individual selection or by ZIP codes due to
miscellaneous reasons, such as bad credit history, inappropriate offer due
to geographic or demographic reasons, poor response rates in that area or
poor response rates in a selective group of people.

The suppression service can reduce the size of
your mailing and produce a better response rate but will also add to the overall
cost of your list. Be sure to find out what the extra charges will be.

The customer list enhancement process involves
the use of data from various sources to enhance your house list. Your list is
run against other lists or databases that contain information about customer's
age, gender, lifestyles, marital status, home ownership or rental, vehicle ownership
and purchasing habits. Access to this additional information about your customers
will allow you to use your mailing list more efficiently. It would allow you
to do some selective direct mail marketing which should result in high response
rates.

The list processor will key code your list for
you. Each different direct mail campaign or test cell should have its own unique
key codes. The key code can be made up of a combination of letters and numbers.
The key code numbers are used in reference to the list, mail package and the
individuals on the list. The key codes are then printed on the different pieces
of the direct mail package, such as the letter, the response piece, envelopes
and the labels. The lettershop can use the key code number to check against
the key codes of the mailing list to be sure the correct package is being mailed,
but the main purpose of the key code is for tracking response information accurately.
The key codes provide a way to keep response information separated for the different
campaigns and test cells.

Your mailing list can be run through a postal
sortation process which will result in the addresses being presorted for addressing
your direct mail package. This sortation service can be provided by your list
processor. There are different levels of sortation that can be provided. The
amount of discount you receive is affected by the level of presort used. Some
of the basic levels are explained below.

Basic Presort Levels

3-Digit Presort

The pieces are sorted in groups that begin with
the same first three numbers in the ZIP code. The three digits represent
a Sectional Center Facility which delivers to the unique 5-digit ZIP
codes.

5-Digit Presort

The 5-digit presort will sort the pieces down to
the unique 5-digit ZIP code areas. If only a 3-digit presort is performed
on the mail pieces, the Sectional Center Facility will sort them to
the 5-digit level when they receive them.

Carrier Route

The Carrier Route code represents the address that
is served by an individual mail carrier within the individual 5-digit
ZIP code areas. This type of presorted mail receives a substantial
discount but must meet all requirements to qualify.

Bar Coding

The list processor can add the POSTNET bar codes
to your files so that they can be imprinted on your mailing labels
or directly onto the direct mail delivery piece. Preprinting the bar
code eliminates the USPS from having to do apply it when they receive
the mailing, which results in savings for the mailer. The POSTNET
bar codes can be a 5-digit ZIP Code, a 9-digit ZIP+4 code or a Delivery
Point Bar Code (DPBC).

Note: The DPBC is a
POSTNET bar code that is formed by adding 10 additional bars (2 digits)
to the ZIP+4 barcode. The DPBC will sort the mail to the carrier level
in walking sequence.

Form more information on how you can save on your postage costs and for the
guidelines that must be followed, talk to your direct mail service provider
or see www.usps.gov.

Media Conversion

There may be times when you need to have your
original mailing list files converted to a different type of media. The converting
process must occur when you purchase a list that is provided on a media that
you can't use. Most of the service bureaus that do the list processing have
the capacity to convert the files to different media types. Some of the media
types that are used are mag tapes, floppy disks, zip or jaz disks, CD-Rom, cartridges
and 9-track. They can also handle electronic media, such as e-mail and FTP.